Apple Will 'Watch Everything Burn' When AI Bubble Bursts - Ed Zitron

[hexcalibur]

Totally agree with him. Needs $1.5 Trillion IN PROFIT not revenue to be a business.

And what does it do other than summarize things? I have yet to see anybody explain what it does other than condense. I have used it to write code, and it sucks. I spent more time fixing bugs it made than the time it saved.
And it is ridiculously expensive for the amount of times it gets things dead wrong.

Initially I confess I bought into the hype and wondered if this AI thing was going to be as transformational as the Internet. That was about 18 months ago. Then I started to recognize the hype for what it really was: marketing.

Now I think it might be somewhere between the original Google search and email in terms of importance. Google figured out how to monetize search and makes a tidy profit doing so. Email doesn't really make anyone rich, but it's an important communication appliance. I think the various flavours of AI we see today all have limited use-cases. They're not going anywhere, but they're not reinventing the world, either. (Well, except with respect to education. In the field of education, genAI is an unstoppable forest fire that will destroy the current educational paradigm within the decade.)

 

[hexcalibur]

In some cases, crypto mining hardware is being reused as Steam Machine clones (see what can be done with the Asrock AMD BC250). One would hope the current hardware can be repurposed and reused in some way. I have an image in my head (that I hope never comes to pass) of squatters in a dark data center surrounded by racks and racks and racks of useless hardware, though.

Nah, they'll be repurposed as sports facilities for indoor Pickleball courts.

 

[IvyKing]

You understand that you're describing OpenAI here, right? There is no possible path to profitability for that company once the VC money runs out. That's been Zitron's whole point for months now.

To make economic sense, the money invested in data centers needs to be made back three to five years at the most. That means revenues need to be 20 to 33% of investment, plus interest on borrowed funds, plus cost of operation (labor, telecom cost, ELECTRICITY) and plus a myriad of other expenses.

Ed Zitron might be going over board in his comments about AI, but his comments about what customers want seems to be right on.

 

[GrumpyOldGuy52]

In the field of education, genAI is an unstoppable forest fire that will destroy the current educational paradigm within the decade.

I'm a high school English teacher, and I'll say destroying that paradigm is not a bad thing.

I'm on the AI steering committee for my district, and I think because educators are involved now, discussing it with their students now, and working to get them to understand how to use AI alongside their classes now, we'll be okay (the luddites who choose to bury their head in the sand and just shout "No AI!" are the ones who are in trouble). I've worked AI into my lessons, and we discuss (early in the year) how to recognize when the AI is doing the thinking for them. We've had some amazing classroom discussions about it. Further, the kids are tired of the screens (they really are). They turn to the screens when they are "bored." If we engage them and remove that boredom factor, it becomes a different situation. It's a balance, to be sure, but I will say this: it's a remarkable time to be in the classroom.

(I should note that part of my research is on how to engage students via play and increase literacy rates. AI has a role in that—it's not necessarily a burden.)

 

[Unregistered 4U]

If you don't know, that tells me you don't work in any industry directly involved with building AI(s) or taking advantage of AI(s) in their products and services.

AI existed long before LLMs in the form of machine learning/learning engines and will only continue to evolve. My company has been heavily invested in and utilizing said technology for nearly a decade, always expanding its use as the tech advances, ensuring our products and services are cutting edge, industry leading offerings trusted by every Fortune 500 company, various governments, and countless enterprise-level players around the globe.

If you can’t say, that tells me you don’t have an idea. That’s fine.

 

[drumcat]

What they're not anticipating is that everyone wants to run locally. That's what Apple is doing.

 

[gleepskip]

I love reading all the crying and the longing for AI to fail.

It's peak entertainment.

 

[Daytona 360]

There's one more piece of the puzzle as to why LLM AI is indeed a fragile bubble. It's the technology itself. No one stops to wonder why these massive energy sucking, water consuming data centers are needed in the first place.

LLM is a brute force mechanism that simulates "intelligence," but it has none and never will. All LLM AI does is catalog massive amounts of data and use massive amounts of energy to brute force probability calculations for what word should come next. It takes material (data) that has already been created and pieces it together into collages. There is nothing original. There is no converging on sentience. Its hype is built entirely around the human tendency to anthropomorphize anything that can remotely be perceived as human, and words in a string that looks like a sentence looks human, even when it isn't. It takes LLM AI massive catalogs of data and massive amounts of computational power to create simulated output that is less reliable than what can be produced by a college sophomore powered by three slices of pizza.

That's not sustainable. Adding more computational power is already yielding diminishing returns, and the feedback loop of unreliable AI output going back into the cataloged data on which LLM agents are built only makes it worse.

Now, bring in the argument that consumers are realizing that LLM AI output is middling and unreliable, and they're not going to keep paying for it.

-Pop-

LLM is the world's best auto-complete. I may use it to finish a sentence, but I am not going to have it compose an entire email or a whole article.

 

[hexcalibur]

I love reading all the crying and the longing for AI to fail.

It's peak entertainment.

AI can't "fail". It's a technology. Claiming that AI will fail is like claiming electricity can fail. Electricity can't fail, but Enron sure as hell can.

And right now OpenAI and Anthropic look a lot more like Enron than Amazon, and for the same reasons.

 

[turbineseaplane]

In five years, no one will need money, because we will live in the era of abundance. That’s what AI said in the Economist interview.

Good luck getting those on the winning side to share any of the prosperity with everybody else on the losing side.

 

[hexcalibur]

I'm a high school English teacher, and I'll say destroying that paradigm is not a bad thing.

I'm on the AI steering committee for my district, and I think because educators are involved now, discussing it with their students now, and working to get them to understand how to use AI alongside their classes now, we'll be okay (the luddites who choose to bury their head in the sand and just shout "No AI!" are the ones who are in trouble). I've worked AI into my lessons, and we discuss (early in the year) how to recognize when the AI is doing the thinking for them. We've had some amazing classroom discussions about it. Further, the kids are tired of the screens (they really are). They turn to the screens when they are "bored." If we engage them and remove that boredom factor, it becomes a different situation. It's a balance, to be sure, but I will say this: it's a remarkable time to be in the classroom.

(I should note that part of my research is on how to engage students via play and increase literacy rates. AI has a role in that—it's not necessarily a burden.)

Maybe not a bad thing, but definitely a chaotic thing. The elite institutions with resources will pivot effectively to teaching in this new environment. The under-resourced public systems -- more specifically, the overworked teachers and professors in those systems -- are struggling.

We're already seeing graduates who don't know half the things their institutions claim to have taught them, and entry-level positions are drying up for those graduates anyway, because organizations believe AI tools can accomplish all the tasks they used to give to entry-level workers. So the value proposition of a university degree will plummet in the next five years. The unemployment rate for 18-25 year-olds, already triple the rate for unemployment as a whole, is going to spike up -- and delayed entry into the workforce has consequences for the rest of your working life.

So...yeah. The technology behind the current AI mania is cool, unquestionably. The social and economic costs? Not so much.

I wish you success in continuing to find ways to keep the kids engaged and learning.

 

[The Werewolf]

I've been saying for a while now that this is the first time Apple's usual pattern of "wait for a new tech to hit the point where it is just about to take off, then jump in with an 'ok' version and claim to have invented it" has actually worked perfectly to avoid a technology.

And it has nothing to do with "privacy". Privacy is the hook Apple uses to market themselves by. It's their gimmick.

BTW, if Apple was that worried about privacy... they'd have this feature:
"the privacy-centric Android variant Graphene OS has another purported solution: a duress password and PIN, which “will irreversibly wipe the device (along with any installed eSIMs) once entered anywhere where the device credentials are requested.”"

They do have a feature that wipes an iOS device after a set number of incorrect PINs, but we've already seen how to get around that.

 

[bmot]

That last sentence goes down like oil.

 

[applezulu]

That wasn’t AI. Well, you could call it AI but it was a powerful computer brute forcing all possible chess moves (not exactly but almost). Which is quite different than LLM-s.

It's "quite different that LLM-s" in that it's the same thing. It's powerful computer brute force calculations not of chess moves, but the most likely word to come next after the last word it brute force calculated. This is why massive, energy-sucking data centers are required, because it's not 'thinking,' it's shuffling through astronomical catalogs of "learned" examples to calculate probabilities of what goes next.

 

[GrumpyOldGuy52]

The under-resourced public systems -- more specifically, the overworked teachers and professors in those systems -- are struggling.

Trust me—I'm in an under-resourced district. And we are struggling, to be sure, but we can survive this (and use it to our advantage).

 

[ofarlig]

Yeah the pricing doesn’t make much sense, for developing I could easily see my work paying the price needed to make it a viable business but I wouldn’t pay that privately. The technology really is amazing but to be worth the actual cost you need a pretty decent efficiency gain on something generating an income on the other side.

 

[applezulu]

AI can't "fail". It's a technology. Claiming that AI will fail is like claiming electricity can fail. Electricity can't fail, but Enron sure as hell can.

And right now OpenAI and Anthropic look a lot more like Enron than Amazon, and for the same reasons.

But it can fail. LLM AI is barking up the wrong tree. It's a dead-end approach.

You can put a dynamo on a hamster wheel and generate electricity from a hamster running on the wheel. You can get a lot of hamsters and wheels and generate more energy. You can select the most athletic hamsters and breed faster hamsters, and generate even more energy. You do that and more, and you are still not going to solve the energy crisis by running hamsters on wheels. That's because running hamsters on wheels is a stupidly inefficient way to generate electricity.

Same goes for LLM AI. It is insanely inefficient, and it doesn't actually do what most people have been led to believe that it does. Faster processors, more memory chips and bigger data centers are just more hamster wheels. The more resources that are dumped into that technology, the bigger the delay will be to finding an artificial intelligence model that actually works.

 

[ofarlig]

But it can fail. LLM AI is barking up the wrong tree. It's a dead-end approach.

You can put a dynamo on a hamster wheel and generate electricity from a hamster running on the wheel. You can get a lot of hamsters and wheels and generate more energy. You can select the most athletic hamsters and breed faster hamsters, and generate even more energy. You do that and more, and you are still not going to solve the energy crisis by running hamsters on wheels. That's because running hamsters on wheels is a stupidly inefficient way to generate electricity.

Same goes for LLM AI. It is insanely inefficient, and it doesn't actually do what most people have been led to believe that it does. Faster processors, more memory chips and bigger data centers are just more hamster wheels. The more resources that are dumped into that technology, the bigger the delay will be to finding an artificial intelligence model that actually works.

What do you mean “actually works”? Current LLMs actually work for what we want it to do, it may be inefficient enough not to be able to be used instead of Googling but as a work tool it is efficient enough to be useful.

We don’t want real artificial intelligence, we are trying to create tools not a life form.

 

[IJ Reilly]

The bubble bursting doesn't mean that AI itself is going to burst. The technology isn't the bubble—the investor insanity around it is. It's the exact same thing as the dotcom bubble—the tech wasn't the bubble. Pets.com was never worth over half a billion in today's cash ($300 million, which was their peak, works out to roughly $580 million today). The same goes for a lot of companies today.

AI is here, and it has been for decades. We know that, and we know (barring a Buterlian Jihad) it's not going to just disappear. It's the exuberance surrounding it. That's what's going to burst (and it's going to hurt).

You demolish your own argument. Everything you claim to know relies on hindsight, the future everyone believes is obvious, after it happens.

You could just as easily have said 25 years ago that anyone who invested in a tiny, unknown company called Google had to be insane. How can they ever go up against Alta Vista? They're first in the search market, and backed by the giant computing company DEC! And yes, that's all you could know at the time when knowing actually made a difference. After the fact isn't worth beans. In reality, nobody knew during the dot-com explosion who was making the right bet. Reality erases your "investor insanity" theory.

So, never say never. Especially when you really don't know.

 

[IJ Reilly]

I don't think "AI" will go bust.

But maybe some AI companies will.

😎

Of course. But knowing who will go bust and who will prosper is just guesswork. Some claim to know. They don't.

 

[GrumpyOldGuy52]

You demolish your own argument. Everything you claim to know relies on hindsight, the future everyone believes is obvious, after it happens.

You could just as easily have said 25 years ago that anyone who invested in a tiny, unknown company called Google had to be insane. How can they ever go up against Alta Vista? They're first in the search market, and backed by the giant computing company DEC! And yes, that's all you could know at the time when knowing actually made a difference. After the fact isn't worth beans. In reality, nobody knew during the dot-com explosion who was making the right bet. Reality erases your "investor insanity" theory.

So, never say never. Especially when you really don't know.

No, I'm pretty sure you've missed the point, and we're in the same situation we were in in the late 1990s—people throwing money at something to get rich quick, and the companies offering that something are buying into the hype. I don't care if the product is dog food, books, search, or AI—this has nothing to do with the product. Never has.

It's about greed, and greed doesn't change.

 

[Ctrlos]

Whilst it's execution left much to be desired I still think Apple Intelligence 1.0 deserves some credit for attempting to put a GUI on artificial intelligence whilst the rest of the industry is still playing Zork. (And many users seem to think typing commands into Zork will miraculously create Ocarina of Time)

Apple Intelligence 2.0 is an all-time great Apple move, letting other companies do the dirty work so they can hoover up the credit.

Still, it's worth remembering that the iPhone 17 became the best selling phone on the market precisely because it didn't have AI chops. If customers have a crap they'd all be switching to Pixel.

 

[IJ Reilly]

No, I'm pretty sure you've missed the point and we're in the same situation we were in the late 1990s—people throwing money at something in order to get rich quick and the companies offering that something are buying into the hype. I don't care if the product is dog food, books, search, or AI. It has nothing to do with the product. Never has.

It's about greed, and greed doesn't change.

No, I totally get the point, but I am baffled by the logic. People were "throwing money" at things then as now in the hopes of being rewarded. This process is called "investing." How dare they! Where do you put your hard-earned money? In a mattress? In places where you hope to lose it, so you can proudly say you have no greed?

Noting that you completely avoided my point about Google. I suppose I'm seeing why.

 

[GrumpyOldGuy52]

No, I totally get the point, but I am baffled by the logic. People were "throwing money" at things then as now in the hopes of being rewarded. This process is called "investing." How dare they! Where do you put your hard-earned money? In a mattress? In places where you hope to lose it, so you can proudly say you have no greed?

Noting that you completely avoided my point about Google. I suppose I'm seeing why.

Perhaps "investing" is broken. Ever think about that? Our economic system is shattered, and you are defending the behavior that has put us there. That's the entire point Zitron's getting at.

As for your off-topic argument, I ignored it because you are a troll, and I'm uninterested in feeding you further.

Good evening.

 

[MiamiFL]

Nah, they'll be repurposed as sports facilities for indoor Pickleball courts.

If you're going to regurgitate something Mark Cuban said and pass it off as your own, at least make it something clever he's said... admittedly, that doesn't leave you much to work with.